Board Talk

Here we go again—Why should we have a nonresident user fee and policy?

By Daria Bossman, State Librarian

Several years ago I wrote an article about the importance of having an established board-approved non-resident policy as well as an established fee. At that time only a handful of public libraries had such a policy and fee in place. The argument we heard over and over was that a fee would "drive business away from our town" or a fee was not "town-friendly." That is hardly an argument unless the library gets some portion of the local sales tax! And of course, recently e-book licensing has changed the landscape quite a bit. If you have a "South Dakota Titles to Go" subscription licensed through OverDrive you need a policy and fee in place—yesterday! In the current environment, regardless of online licensing agreements, it is legally much safer to have a policy and fee in place. Yet it is important for your community to understand why a "public library" is charging a fee to those who live outside the LSA-legal service area. The answer is simple. Services, staff and resources cost money and the local property taxes help support that local library. A non-resident fee should be fair and equitable, not more than what locals are paying annually per person in taxes but not less either.

So do you serve folks in your broader community who do not pay local property taxes and thus do not support the public library they use? If so, you might want to rethink your position of not charging a user's fee for nonresidents who do not support the library with the property tax dollars. It is important to understand such a fee would be in lieu of taxes, not an additional tax. Every public library should have a policy in place which protects your tax-paying citizens. It should be a written, board-approved policy and reevaluated every couple of years.

What does "Free" Public Library mean?
An established non-resident library fee makes the point that library services are not really "free" in the sense that someone has to pick up the tab. In the era of Benjamin Franklin the term "free library" began to be bantered about. In the 18th and early 19th century, libraries in America were private affairs. Wealthy and well-educated folks spent their lives investing in a personal "library" collection which they often made available to friends and acquaintances. Did you know that Thomas Jefferson's private library became the foundation of our present day United States Library of Congress? Libraries also were the purview of universities, but not of municipalities! Again, enrollment in those colleges meant access with tuition dollars paying for the right to use such shared collections. But no such resources were available for the masses. Then something wonderful began to happen across our nation. In our young democratic country the cry went up that "everyone was equal" and had the rights of "life, liberty and the pursuit of happiness." Self-education became one of the hallmark values of our emerging, uniquely American culture teeming with immigrants who wanted to learn English and get an education. The push for free libraries (in this context "free" meant open access and publically funded) began to emerge in many a large cities and small villages as well. As our country expanded westward, a church, a school and a public library became the hallmarks of a civilized community. Thus the titles, the Philadelphia Free Public Library or the Potter County Free Library still remain to this day. However, today, we sometimes take our publically funded "free" public libraries for granted, assuming they are "free" to operate when in reality, that word means more closely, "accessible for all."

The shared responsibility of financially supporting the operations of a library—utilities, building, educational programming, technology, materials, resources, databases, books, magazines, games, staffing, etc. is a shared burden and shared responsibility by the citizens of a specific locale. Each community determines the extent to which they will or will not fund a public library. In the US, public libraries have evolved into a uniquely local institution. They stand as a unique expression of our nation's unquenchable thirst for knowledge and determination to give every individual the right to information and knowledge, to improve one's lot in life and to be self-educated. It is uniquely "American" and has only begun in recent decades to be imitated in other emerging democracies around the world.

In summary, a Non-Resident fee policy accomplishes several important things:

It opens up the library to users beyond the limitations of the community tax base,

It increases the value of the public library both in terms of additional revenue to support the services but also in the eyes of the community,

It creates public awareness that it is a publically funded service and not "free" in the sense that it takes money to keep a library open and operational,

It wards against user-abuse or misunderstandings,

Such a policy protects local tax-payers, who have a financial and emotional vested interest in that particular public library,

It reimburses the library for resources, service and staff time used by nonresidents, and

It legally protects the library board from potential lawsuits.

Average cost of doing business
Nearly half, 48% of all SD public libraries now have an annual user's fee and policy in place. That is still too few and the fees in many situations are far too low to be effective or termed equitable. They range from minimal amounts like $3.00 per person to $80.00 per year per family. Watertown Regional's non-resident fee, $37.00 is actually adjusted annually to mirror the city's per capita tax support for the library. The average library fee among these 48 libraries is currently around $20.00 per person.

The average per capita expense in SD communities providing public library service in 2011 was $30.12. Preliminary 2012 data shows a per capita cost of $36.33 among 108 reporting public libraries. Nationally in 2011 the per capita cost was $35.83. You can figure out how much each citizen pays for library services in your area by taking your most recent total annual library expenditures and divide that sum by the total number of citizens in your city (or county if you have a county system). You can also find out from your city or county finance folks what the exact tax levy is per person for library support to get a per capita figure. But if you have other significant revenue sources the figures off the Public Library Survey might give you a clearer per capita "real" cost of running your library. These figures will give you the actual amount your library needs in tax support from each local citizen to operate at your current level. Thus it informs the library board as to what your local non-resident fee should be. It is always interesting to realize what that figure is. The librarian or board treasurer should do this calculation every year and share it in the Director's report to the City Council or County Commissioners. This gives us a new appreciation for each local tax-paying citizen's contribution and for the local library services provided. No one profession, outside of educators perhaps, stretches a dollar better than a librarian. If you are not good at math calculations, ask the city finance officer to assist you or give us a call.

Regardless, we would recommend an annual nonresident (non-tax paying) user's fee of at least $30.00 per person (that is .08 cents a day or .58 cents /week) or $60.00 per family in rural areas and more in metropolitan areas where increased hours and the services and resources are more plentiful. However, with increased usage of computers, technology and access to electronic resources, and expanded programming in many rural libraries that "difference" between larger and smaller public libraries is lessening.

A Similar Situation
You may want to think of this similar situation - your school district accepts students into their school through a program called "open enrollment." However, no local school would allow a non-resident student into their school without funding (tax dollars) coming with that student to help support his or her education. It is the same principal. Library boards have a responsibility to promote the library which is a local educational institution. The board has a solemn duty to provide for the adequate provision, up-keep and funding of the library's operations. This includes making sure that the public library is not inappropriately drained of resources at the expense of its local citizens being served first and foremost.

One Interesting South Dakota exception
There are some unique circumstances within South Dakota and these circumstances affect how your library might define "nonresident." Certainly with county library systems a nonresident would be defined as living outside the boundaries of that county. In a countywide system the county board of supervisors is the direct boss of the library board. Thus, they provide the bulk of the funding for the library system whether there is one main library and several branches or just one library within that county. However, we do have in the Black Hills a number of counties which have chosen to liberally fund the municipal libraries within their counties. These local public libraries continue to be independent and their authority to exist still resides with the local municipalities. In these instances the county commissioners have in essence elected to pay for all their county residents to use all the libraries within their county boundaries. Thus the county supplements the operational income of these municipal libraries annually with tens of thousands of tax-supported dollars. In these situations, a town library may elect to have a nonresident fee policy, but to define a nonresident as someone living not outside their town, but living outside the county lines.

Something to think about
The important thing to take away is that it is vital for each library board to write, approve and have in place a user's policy and more specifically, a nonresident (however you define it) user's fee policy. Even if you chose to not charge anyone living beyond your defined boundaries, it is a very wise practice to have a written policy stating why you do not charge nonresidents (non-tax payers) for library usage. One example would be where the municipal library receives from the county supervisors a healthy contribution of county funds to its annual budget. Regardless of your circumstances such policies could protect the library board from potential lawsuits by disgruntled tax-paying citizens who could deem your open practices as unfair to those who do support the library with their tax dollars!

As always, the State Library is here to assist and advise. If you or your board has questions, please don't hesitate to give us a call, 605-773-3131 or 1-800-423-6665. In the meantime, put this topic on your next agenda for discussion! In light of the recent library districting legislation and discussions, this has never been a timelier topic.

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